13 February 2020 Double-digit domestic sales growth, while lower than forecast, is very healthy in the current environment. Higher milk & milk derivative costs are likely to weigh on near-term earnings growth, but longer-term prospects remain robust. Valuations of 58.1x/48.6x CY21/22E EPS fully factor in upside from one- year perspective. Domestic sales grew 10% YoY, largely driven by volume/mix. Export sales declined 9.7% YoY due to lower coffee exports to Turkey. Gross margin shrank 220bp YoY to 56.8% due to higher commodity cost, particularly milk and its derivatives. Higher staff costs (+60bp YoY to 10.2%) and lower other expenses (-290bp YoY to 25.2%) led to EBITDA margin expansion of 20bp YoY to 21.